INVEST IN ANDHRA PRADESH SCHEMES

The newly elected Andhra Pradesh Government has unveiled six dynamic policies designed to propel economic growth, boost exports, and generate new employment opportunities across the state. The Hon'ble Chief Minister of Andhra Pradesh introduced these policies to both India and the world, extending a warm invitation to industrialists and investors to partner in this ambitious endeavor.

The policies, set to be implemented during FY 2024-2029, aim to attract Rs. 30 lakh crores in investments and create 5 lakh jobs over the next five years, focusing solely on the manufacturing sector. The Government believes that these initiatives will harness the strengths of Andhra Pradesh’s key sectors while fostering the development of emerging industries. A noteworthy highlight is the plan to establish one Industrial Park in each of the 175 assembly constituencies.

With a target to draw Rs. 83,000 crores in Foreign Direct Investment (FDI) and support 22 lakh MSME units, these policies also aim to significantly enhance exports from the state, with a goal of achieving Rs. 33,000 crores in exports by 2029.

The salient features of these key policies include:

1. AP Industrial Development Policy 4.0 - Support for reimbursement of land acquisition costs for new industrial units. The policy offers incentives up to 62 per cent for the first 200 early investors and up to 72 per cent incentives for value-addition investors who engage in component manufacturing. Promotes sustainable business practices and inclusive industrial growth. Supports R&D initiatives and collaboration with academic institutions.
2. AP MSME & Entrepreneur Development Policy 4.0 - Policy offers up to 75 per cent of investment as incentives to make MSME products price competitive. Encourages the establishment of 22 lakh MSME units. Facilitates businesses in showcasing their products and connecting with buyers. Offers targeted support for women entrepreneurs.
3. AP Food Processing Policy 4.0 - Promotes organic farming practices. Financial support for interest payments on loans taken. Aims to create a vibrant, inclusive food processing ecosystem. Assistance in obtaining quality certifications (e.g., FSSAI, ISO)
4. AP Electronics Policy 4.0 - Mega industries can receive up to 45 per cent incentives which include investment subsidy, employment subsidy, power subsidy, recruitment assistance and others. Focuses on the electronics manufacturing sector. Provides subsidies for capital investment, land acquisition, utility costs, and tax benefits.
5. AP Private Parks Policy 4.0 - Private Park developers under AP Industrial Park Policy 4.0 may get up to Rs 5 lakh capital subsidy per acre and exemption of charges for layout approvals, land use, stamp & registration and others. Invites private sector participation in park development.
6. AP Integrated Clean Energy Policy 4.0 - Aims to transition the state towards renewable energy and achieve solar energy capacity of 78.5 GW, 22 GW pumped storage, and produce 1.5 MMTPA green hydrogen Encourages participation in clean energy initiatives. Financial support for new startups focusing on clean energy solutions

While the full text of these policies is awaited, the incentives offered are likely to be attractive for manufacturing sector and would also result in significant investment in the state of Andhra Pradesh. Please follow this space closely to dissect each of the policies in more detail as and when the same are released.

CA Kaushal Kr. Shaw Lokesh Aaswani Ahuja Valecha & Associates LLP AVA Insights